Australia is set to make a major shift in its occupational statistical classifications with the introduction of the Occupation Standard Classification for Australia (OSCA), which will be released in December 2024. This new classification marks a significant step in Australia’s ability to tailor its workforce data to better reflect its unique labour market needs, moving away from the previous joint classification with New Zealand under the Australian and New Zealand Standard Classification of Occupations (ANZSCO).
Background: From ANZSCO to OSCA
Since 2006, the Australian Bureau of Statistics (ABS) and Stats NZ Tatauranga Aotearoa (Stats NZ) have managed the Australian and New Zealand Standard Classification of Occupations (ANZSCO). This system has played a pivotal role in providing standardised occupational data for both nations. However, after more than a decade of shared custodianship, the differences between the Australian and New Zealand labour markets have become too significant to manage within a single framework.
In response, both Australia and New Zealand have decided to introduce their own tailored occupational statistical classifications. For Australia, this new classification will be OSCA, version 1.0, marking a significant departure from the shared ANZSCO system.
Why the Change?
The decision to move to separate occupational classifications is driven by several key factors, including:
- Diverging Labour Markets: Since ANZSCO’s inception, Australia’s and New Zealand’s labour markets have evolved in distinct ways. One striking example of this divergence is the change in skill levels across occupations in the two countries. While ANZSCO originally assigned common skill levels to all occupations in both Australia and New Zealand, 56 of the 1,076 occupations now have different skill levels in the two countries. This disparity has highlighted the need for a classification system that reflects the specific needs and realities of the Australian labour market.
- Increased Stakeholder Demand: Both countries have experienced growing stakeholder demand for data that better reflects local labour market conditions. For Australia, this demand is partly driven by a comprehensive review and update of ANZSCO, funded by a $23.7 million investment from the Australian government. The update was undertaken to ensure that the classification remains relevant to Australia’s current and future workforce needs.
- Targeted Updates in Australia: Over the past few years, Australia has undertaken a series of targeted reviews to update ANZSCO, including in 2021 and 2022. However, Stats NZ was unable to participate in these updates, further driving the decision to move towards a national classification system that can be maintained and updated
- Independently.
Key Changes with OSCA
The introduction of OSCA will bring several key changes to how occupational data is classified and reported in Australia. Here’s what stakeholders can expect:
- A National Focus: Unlike ANZSCO, which considers labour market conditions in both Australia and New Zealand, OSCA will focus solely on the Australian labour market. This means that skill levels, occupational descriptions, and classifications will be tailored to reflect Australian job roles and employment trends.
- Removal of New Zealand-Specific Occupations: OSCA will not include any references to New Zealand-specific occupations, skill levels, or qualifications. For instance, the seven occupations that are unique to New Zealand in ANZSCO 2022 will no longer be visible in OSCA. This streamlining will allow the classification to better focus on Australian workforce needs without being encumbered by data that is irrelevant to Australia.
- Revised Skill Levels: Skill levels will be determined based on Australian criteria alone. ANZSCO 2022 had documented instances where skill levels for the same occupation differed between Australia and New Zealand, which will no longer be a consideration under OSCA.
- Changes to Terminology: All references to Te Reo Māori terminology and the New Zealand Qualifications Framework will be removed in OSCA, as will alternative titles, specialisations, and other terminology specific to the New Zealand context.
- Maintaining International Comparability: While OSCA will be a tailored national classification, it will maintain comparability with ANZSCO through concordances that allow labour market comparisons between Australia and New Zealand. This will enable stakeholders to still gain insights into broader regional employment trends while recognising the distinct needs of each nation’s labour market.
- Continued Collaboration with New Zealand: Despite this shift, the ABS and Stats NZ will continue to work closely together to ensure that data standards remain aligned across the two countries. While each country will now manage its own classification,
Transition from ANZSCO to OSCA: What This Means for Australia
The transition from the Australian and New Zealand Standard Classification of Occupations (ANZSCO) to the Occupation Standard Classification for Australia (OSCA) marks a significant shift in how Australia will collect, analyse, and use occupation-related data. With OSCA set to be introduced on 6 December 2024, this change represents a tailored approach that better aligns with Australia's labour market needs.
While maintaining comparability with ANZSCO, OSCA has been designed specifically to reflect the realities of the Australian workforce, and its launch highlights the increasing divergence between the labour markets of Australia and New Zealand.
Why the Transition?
The differences between the Australian and New Zealand labour markets have widened considerably since the introduction of ANZSCO in 2006. As of now, 56 out of the 1,076 occupations in ANZSCO have different skill levels in Australia and New Zealand, underscoring the need for separate classifications.
Further, New Zealand was unable to participate in the 2021 and 2022 targeted reviews of ANZSCO undertaken by the ABS. These reviews led to important updates to reflect changes in the Australian labour market, and the comprehensive review that followed considered Australian-specific factors only.
The transition to OSCA allows Australia to adopt a classification system that caters directly to its evolving workforce, training, and policy needs while maintaining global comparability where possible.
Key Differences Between OSCA and ANZSCO
The introduction of OSCA will bring about several critical changes, including:
- Australia-Only Classification: The new OSCA classification will focus exclusively on the Australian labour market, removing any references to New Zealand.
- Removal of New Zealand-Specific Occupations: Seven occupations that are unique to the New Zealand market will no longer be present in OSCA. Occupations that are predominantly found in New Zealand will be aggregated based on skill levels and main tasks.
- No More Joint Occupation Names: OSCA will have its own set of occupation names, lead statements, alternative titles, and specialisations, all specific to the Australian context. The inclusion of Te Reo Māori terminology, a feature of ANZSCO, will also be removed.
- Australian Skill Levels Only: OSCA will base skill levels solely on the Australian labour market without considering the corresponding New Zealand data. This will allow for a more accurate reflection of the requirements and qualifications relevant to Australian employers and workers.
- Removal of New Zealand Qualifications Framework (NZQF) References: Any references to the NZQF or the New Zealand labour market, which were present in ANZSCO, will be excluded from OSCA. This ensures that the classification is more aligned with the Australian Qualifications Framework (AQF) and the unique conditions of the Australian job market.
Implications for Stakeholders
Employers and HR Professionals
With the implementation of OSCA, Australian employers will benefit from a more precise classification system tailored to their specific needs. This can result in more accurate job descriptions, recruitment processes, and workforce planning.
Training and Education Providers
Vocational and higher education institutions will need to align their programs and qualifications with the updated skill levels and occupation classifications defined in OSCA. This will also affect how training funding is distributed, ensuring that training aligns more closely with labour market demands.
Policymakers
The introduction of OSCA will provide policymakers with more relevant data to shape employment, immigration, and workforce development policies. The tailored nature of OSCA will allow for more accurate predictions and assessments of labour shortages, training needs, and skill gaps within the Australian economy.
International Comparability
While OSCA is focused on the Australian context, the ABS and Stats NZ will maintain close collaboration to ensure that occupation data remains comparable across both countries. Concordances between OSCA and ANZSCO will be developed to allow for cross-border labour market comparisons, ensuring that researchers, analysts, and government bodies can still draw relevant insights from both classifications.
Ongoing Maintenance and Updates
The move to OSCA is not a one-time event. The Australian Government has committed to an ongoing maintenance program starting in 2025, ensuring that OSCA remains up-to-date with evolving trends in the labour market. This is a key improvement over ANZSCO, which has undergone only limited updates since its inception.
The $23.7 million funding allocated over four years for the comprehensive update and ongoing maintenance of OSCA underscores the importance of having a flexible and dynamic classification system that can adapt to the rapid changes in the workforce.
Future of Joint Classifications with New Zealand
While ANZSCO is transitioning into separate classifications for each country, two other significant joint classifications between Australia and New Zealand will remain unchanged for the time being:
- Australian and New Zealand Standard Offence Classification (ANZSOC): This classification will continue to provide a standardised approach to coding and classifying offences, essential for statistical analysis in law enforcement and criminal justice across both countries.
- Australian and New Zealand Standard Research Classification (ANZSRC): This system will also remain a shared classification, ensuring consistency in research and development efforts across Australia and New Zealand.
However, the Australian and New Zealand Standard Industrial Classification (ANZSIC) is currently under review. Whether this classification will remain joint or transition to a system similar to OSCA is yet to be determined.
